EUR/USD Moves Sharply to the Upside, Breaks 1.22
- Euro pushes higher against a weaker US dollar
- Key US data coming in that may affect the exchange rate
EUR/USD Moves Sharply to the Upside
The EUR/USD pair is moving swiftly to the upside on Thursday. Boosted by the bull camp who is on its way to push the EUR/USD higher for a second straight session. The euro has been favored by investors recently as it is making new highs against the US dollar, the Swiss franc, and the Japanese yen.
The EUR/USD is being lifted on Thursday to a high of 1.2235, rising by 0.65% on the day. The euro started the Asian session relatively subdued and to the downside. But it quickly erased the mild losses to reach a one-and-a-half-month high against the weaker US dollar.
The pair has been in an uptrend following Federal Chair Jerome Powell’s remarks on fears of rising inflation and rising interest rates. Investors cheered the reiterated support by the Federal Reserve to keep its monetary policy unchanged. And therefore it is expected the Federal Reserve will continue its asset purchase program while maintaining the low-interest rate.
Key US Data Coming in That May Affect the Exchange Rate
The EUR/USD, now trading at a six-week high. After it broke the 1.2230 mark, the currency remains challenged ahead of key US data coming in today. The movement in the pair will be affected by the initial jobless claims report and the US GDP data set for release at 08:30 am EST today.
The GDP reading will indicate how the economy performed in the fourth quarter of 2020 compared to the same quarter of the previous year. Investors will also watch for signs of improving the jobs market in the initial jobless claims data.
Delays in Vaccine Delivery
On the euro side of the pair, market participants appear to have already priced in the delay in the delivery of AstraZeneca’s vaccine to the European Union. Euro traders also seem to cheer the new Italian Prime Minister Mario Draghi. He is expected to present Italy’s plan for the adoption of EU funding. Thus, tackling the pandemic and steering the economy out of the slump.
If the EUR/USD continues to march higher, it faces the latest top of 1.2350 made in early January. On the other side, if bears regain control over the exchange rate, we could see another attempt to push the pair below the recent bottom of 1.1952 reached in the first week of February.
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